US employers add a solid 151,000 jobs last month though unemployment up
to 4.1%
[March 08, 2025] By
PAUL WISEMAN
WASHINGTON (AP) — U.S. employers added solid 151,000 jobs last month,
but the outlook is cloudy as President Donald Trump threatens a trade
war, purges the federal workforce and promises to deport millions of
immigrants.
The Labor Department reported Friday that hiring was up from a revised
125,000 in January. Economists had expected 160,000 new jobs last month.
The unemployment rate rose slightly to 4.1% as the number jobless
Americans rose by 203,000.
Employment rose in healthcare, finance and transportation and
warehousing. The federal government shed 10,000 jobs, the most since
June 2022, though economists don’t expect Trump’s federal layoffs to
have much of an impact until the March jobs report. Restaurants and bars
cut nearly 28,000 jobs last month on top of a loss of almost 30,000 in
January.
“The labor market continues to hold up, but we’re still a far cry from
where we were a year or two years ago,’’ said Sarah House, senior
economist at Wells Fargo.
House expects hiring to slow and unemployment to creep higher as Trump
continues to cut spending on programs and slash the federal workforce,
while imposing tariffs on America's trading partners.
The spending cuts “are likely to spill over into the private sector,
hitting contractors and nonprofits, and we still have a trade war that
is picking up,’’ House said. “There are multiple battles for the labor
market to fight off, multiple shocks it’s having to work through in the
months ahead.’’
The economy’s unexpectedly strong recovery from the pandemic recession
of 2020 set loose an inflationary surge that peaked in June 2022 when
prices came in 9.1% higher than they’d been a year earlier.
In response, the Federal Reserve raised its benchmark interest rate 11
times in 2022 and 2023, taking it to the highest level in more than two
decades. The economy remained sturdy despite the higher borrowing costs,
defying expectations of a recession, thanks to strong consumer spending,
big productivity gains at businesses and an influx of immigrants who
eased labor shortages.
The American job market has remained remarkably resilient, but it has
cooled from the red-hot hiring of 2021-2023. Employers added a decent
average of 168,000 jobs a month last year. But that was down from
216,000 in 2023, 380,000 in 2022 and a record 603,000 in 2021 as the
economy rebounded from COVID-19 lockdowns.
Inflation came down – dropping to 2.4% in September -- allowing the Fed
to reverse course and cut rates three times in 2024. The rate-cutting
was expected to continue this year, but progress on inflation has
stalled since summer, and the Fed has held off.
Average hourly earnings rose 0.3% last month, down from a 0.4% increase
in January.
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A person waits in a line for a prospective employer at a job fair,
Thursday, Aug. 29, 2024, in Sunrise, Fla. (AP Photo/Lynne Sladky,
File)
 Fed officials will likely see the
figures as supporting their current wait-and-see approach toward
interest-rate cuts. With inflation still modestly above the Fed’s 2%
target, several have made clear in recent remarks that they would
like to see more progress before cutting their benchmark rate any
further.
Steady hiring and an expanding economy make it easier for the Fed to
stay on the sidelines. Should companies start laying off workers and
the unemployment rate rise, pressure could rise on the Fed to cut
rates.
On Thursday, Fed governor Chris Waller suggested a cut was unlikely
at the central bank’s March meeting, adding that Fed officials would
like to see more data before making any further moves.
Rick Gillespie, chief commercial officer at Columbus, Ohio-based
Revive Environmental Technology LLC, said he is bullish about the
prospects for the environmental contamination mitigation and water
treatment company despite the uncertain economy.
Revive, which currently has 34 full-time employees, plans to add a
total of another 10 to 20 workers in Columbus, Ohio and Grand
Rapids, Michigan, in the next few months, Gillespie said. Revive has
found a way to destroy a toxic chemical called PFAS that is found in
everyday items like nonstick cookware, waterproof weather jackets
and cell phones and can end up in landfills, drinking water, and
industrial waste water.
Others are seeing a shakeout in the economy.
Sheela Mohan-Peterson, who owns a franchise of the Patrice &
Associates recruiting firm, said she’s starting to get more resumes
from top-level executives who worked at biotech and high tech
companies. “We’re talking C Suite level’’ – chief financial
officers, chief technology officers, even a couple of CEOs, she
said.
She used to get maybe one of those resumes a month. Since the end of
last year, she’s seeing one or two a week. “It has definitely
accelerated in the last month,’’ she said. Mohan-Peterson believes
its fallout from the chaotic federal spending cuts.
“Especially startups, they do depend on federal grants to get going,
and they’re starting to see those disappear or threaten to
disappear,’’ she said. “They’re starting to get rid of their
high-paid executives so that they can save some money because they
can’t count on those grants.’’
A former biotech lawyer, Mohan-Peterson acquired her recruiting
franchise in 2023, and she’s seen the job market cool since then.
“2023 was great. There were a lot of jobs around,” she said. “2024,
I started to see a slowdown. It was very, very slight. But toward
the end of the year it started getting harder and harder to find
placements for very skilled workers.’’
____
AP Economics Writer Christopher Rugaber and AP Retail Writer Anne
D'Innocenzio in New York contributed to this story.
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